2008

At each moment of our lives we are making a decision of what to do, think and feel. We can choose to do something new or decide to do something we have done for ages. Some of these decisions are highly limited or even decided for us because of our need to make money and survive. Much of our day is routine and we basically function on autopilot as we execute repetitive tasks such as walking, eating and driving. Even more thoughtless repetition goes into chores, tasks and the execution of most people’s jobs.

Yet, despite this inbred repetition there are thousands of moments each day when we have choices in our life. We can either go deeper in an interest or do something new and different. Going deeper into an interest or hobby or gaining furhter mastery of a skill we have is vertical growth. Delighting in a new experience is horizontal growth.

Some individuals have very few interests that they hone and master, while others like to dabble in a multitude of things finding joy in the novelty of new experience. No human being is devoid of new experiences and, likewise, no person’s life is free of some level of repetition.

There is beauty in both mastery and novelty, in depth and variety. Something new today could easily become an area of interest worthy of discipline and mastery tomorrow. There is beauty, and potential satisfaction in both vertical and horizontal growth. Many people spend countless hours regretting the choices they make either feeling their lives lack depth or diversity. Either tendency can be rewarding or empty. The important thing is to find what balance between depth and novelty provides your life with the greatest sense of satisfaction and meaning.

Our society seems to over reward vertical growth and dissuade one from horizontal growth. Very seldom is obsessive/compulsive behavior rewarding and satisfying. Most often compulsive behavior is a feeble attempt at covering up a sense of emptiness or dissatisfaction. Yet, those who do things to an excess end up doing that specific thing better than others and that is often the definition of success in a competitive capitalistic society.

The person who works the most hours or spends each waking moment playing their instrument is most likely to succeed in a society based on competition. People with no variety in their lives, no sense of family, friendship or relaxing reflection have an advantage over those who have rounded diverse lives.

This is why our society is rather harsh on those who are not driven and compulsive. People who are not driven are often referred to as lazy or lacking direction. They are looked at as being common and unworthy of attention and respect.

The shame of this is that our society rewards and honors the driven compulsive people whose very natical ure makes them depressed or at least empty.

This is not to imply that there is anything inherently wrong with vertical growth, for each person will find their own blend of the old and the new which they find pleasing and satisfying. Yet, their does seem to be something wrong with a society that fosters and rewards a style of life which is empty and unsatisfying.

A sense of meaning seems to be most easily gleaned from things mastered and with the longest history. Yet, there is a certain kind of joy only offered by the new and refreshing. Both experiences seem to be necessary for a cocktail promising a satisfying existence. A new love or discovery has us feel competent, alive and young while the familiar and the mastered gives us a sense of accomplishment and self-worth.

Each of us has to find our own mixture of the old and the new, of depth and novelty of vertical and horizontal growth. Like the old song said, “make new friends but keep the old, one is silver and the other is gold”.

Jim Guido

PS My site is currently being updated. In the short term some of my lyrics have disappeared. I hope to have them restored soon.

Well each appointment by Obama continues to disappoint and shows Obama to be less change oriented than he led us to believe. He has consistently surrounded himself with policy advisors and experts who are profoundly old school and whose policies have created the economic and diplomatic mess we currently find ourselves in. His securities and exchange appointee is only a little better than if he would have named Madoff to ferret out fraud and lead regulatory oversight.

I know I might seem a little hard on Obama before he’s even been sworn in, but I can’t help but feel validated in my belief that no true reformer would be allowed to win either party’s nomination. The corporate/industrial complex with its ownership/influence over the media would not tolerate a true change oriented person to become president. Anyone can talk change, they just can’t act on it. In fact the better someone is at talking change and deceiving the public into believing that change is actually occuring while the status quo continues is not only electable, but preferred.

The power elite are thrilled when a president is able to convince the citizenry that our government has the noblest of intentions, is dedicated to insuring the freedom and raising the standard of living of every American, and cares about their happiness and success. Ronald Reagan, Bill Clinton, even George Bush (you choose) was able to convince the majority of Americans that we are the leaders in positive change and a beacon for the rest of the world. The fact that most American’s still passionately love their party and hate/fear the other shows that most of us still believe the great con and are unwilling to demand the kind of structural change we would need to begin to live up to our beautiful ideals and sentiments.

True change will not come until we demand our leaders actions to match their words.

President Bush has become less and less visible during his two terms. He seldom talks directly to the American people and instead has a steady stream of press handlers speak for him. When he does speak it is usually of the evil intentions of those who are jealous of our freedom, and the importance of the war on terrorism. A war, which is quick to point out, will last for years if not decades.

In this regard Obama will be a breath of fresh air and a partial healer of the US psyche. During hard times or significant events I imagine Obama will speak to the nation with a reassuring tone. He will help all the unemployed and those hardest hit by the coming depression to feel hope. He will offer succor both verbal and through policies which will create jobs. I can picture his confident tone and reassuring words fostering a spirit of charity, understanding and mutual support which will help quell the anger and hatred that can fester during hard times. Unlike Bush, Obama won’t hide from the public or only be able to unite people through fear and hatred.

Yet, despite these positives I still see him continuing the policies of fear and hatred on the international scene. He already has shown this tendency in his hawkish statements towards Iran, Afghanistan and in his status quo empty rhetoric regarding the war on terrorism. I was too young to remember, but I have a hard time imagining that people continued to call everyone a Communist after the downfall of McCarthy. When will we stop allowing our politicians to get us to hate people by calling them terrorists, or get us to support immoral policies because of their being justified by the war on terrorism?

We are not going to get true change until we stop selling our political system short, or demand more from our candidates. The military/industrial complex is confident we never will. Will we?

I must begin by apologizing for the title of this post, but I’ve been chuckling to myself on this word play for months now. I couldn’t resist finally using it.

I want to start by saying I have nothing personally against Obama, in fact, I find him to be an enjoyable and articulate well intentioned person. I also want to say that I don’t want to be lumped into the general crowd who always hate one party or candidate while loving the other.

Those who regularly read my posts know that I see little difference between the two parties and desire structural change in our political system. In a previous post I explained that I felt any candidate expressing true change or promised to rock the status quo would not be allowed to win the nomination of either party. The character assasinations and marginalization of people such as Ron Paul, Dennis Kucinich, and Howard Dean are just the three most known examples over the last two elections.

Now I realize that many of those who voted for Obama feel that he is a true reformer, and even think of him as a political redeemer. Yet, his earliest actions seem to refute that conception and support my view that he must be a status quo kind of guy in reformer clothes (ala Bill Cinton).

A quick look at Obama’s cabinet and inner circle of advisors is all it takes to dispel any serious notion of him being a true breath of fresh air and reformer of the US political system.

His words of change and hope are greatly belied by his choice of cabinet members. While Obama talks of an overhaul of our elitist form of economics and a desire to close the gap between have and have nots, he has surrounded himself with the very policy makers which appear responsible for the current credit and economic crisis.

As a solution to our being viewed as a bully in the middle east incapable of respecting the sovereignty of the regions nations and being a lap dog of Israel Obama retains the current Secretary of Defense and has Ms. Clinton as Secretary of State. In foreign news papers Hillary is often cited as one of the most biased pro-Israel politicians in the US. Add to this Obama’s inflammatory rhetoric towards Iran, and his hawkish comments regarding Afghanistan and you have a hard time exiting the status quo. Even Obama’s hackneyed statements regarding “terrorists” and “the war on terrorism” do little to foster a new culture of change and hope.

The more I see and the more I hear, its just (same ol’, same ol’).

I hear many people defending Obama and saying he had to appoint these people, and had to make those statements in order to get people to work for him. True visionaries don’t have to lower their standards, they raise everyone elses. Am I to believe that these were the only qualified people available? Even if Obama didn’t know of any emerging great minds in economics or middle east politics couldn’t he have gone to any respected university and asked professors if they had any students over the past decade which showed promise to be a gifted thinker?

I can’t think of a single successful reformer who accomplished significant change by surrounding him/herself with in-crowd status quo leaders. I do realize that balance and diversity are important ingredients in good government. I’m not saying that every member of Obama’s inner circle needs to be a visionary, or a liberal or even a democrat. All I’m saying is that if your looking for a new menu, you need to have a few new chefs.

All we appear to be doing is building a house using the same materials we’ve been using for decades. Or a more timely analogy is building new cars with the same old parts.

The US has long been the center of over consumption. Living beyond one’s means has been a crucial element in the success of modern capitalism. Those living simply or basically buying according to need were a drag on the economic boon of the US. Capitalism needs excess and waste in order to survive and flourish. The following equation may look like word play, but it is more true than one would think at first blush.

Profit = surplus = excess = waste

When people buy only what they need the economy contracts and we have a recession. When it contracts for a length of time we have a depression. The last economic boon lasted some 30 years, much longer than previous growth periods. Yet, the bulk of this growth was gained through debt accumulation and monetary growth, not through wages and industry.

The dominoes have just begun to fall. Mass layoffs are still in their infancy and will have to run their course. House prices still have far to fall to reach the historical mean. Houses have historically cost a person about three years salary, the average salary is under 50,000 a year and the average house is still well over 150,000. Either salaries need to drastically rise or house prices drastically need to fall. Guess which will happen.

Though the credit bubble has popped, it still is above the peak of insanity we reached in 1929. Yes, you read that correctly. What this means is that the amount of debt as compared to a percentage of Gross Domestic Product is still significantly higher than the peak of the roaring twenties.

All previous down markets have lasted three eighths as long as the preceding up phase. This would mean the stock market will be going down till 2016 – 2017. Since stock markets usually rebound before the economy, one can assume the economy will remain weak and contract at least through 2016.

This all leads me to the title of this post. Is this the last Christmas of post WWII over consumption? Or is this a lost Christmas, and last year was the final hurrah?

The media will do its job of being schizophrenic having conflicting stories talking of dismal retail sales while occasionally spouting statistics which depict a surprisingly healthy consumer. Most of these stats and spins will be put out by retailers hoping to convince consumers to go out and spend to avoid the stigma of being the only person not giving every one top notch presents. Maybe, these misleading stats and stories will work, after all they are experts at advertising and consumptive propaganda.

Already I’ve seen deceptive articles such as one that stated this Thanksgiving weekend was 7.2% higher than the same weekend last year. This article appeared to contradict other articles in the same newspaper which stated that the weekend was less than 3% better than sales of last years Thanksgiving weekend. This apparent conflict is resolved when you realize that the 7.2% rise is comparing Thanksgiving weekend of this year with the week after Thanksgiving of last year. This is because Thanksgiving is relatively late this calendar year.

You can expect to see many deceptive articles and statistics this holiday season. It may help make this the last Christmas as opposed to the lost Christmas. But one thing is for certain this economy has a long contraction in front of it. So if you are not in debt you are becoming wealthier by the day as prices come down and the global money supply goes through a much needed contraction.

Thanks Giving

I feel very fortunate and thankful. I have a wonderful and generally fulfilling life. I have a loving and growth oriented marriage of 25 years, a son worthy of praise and admiration, and a life style fitted to my nature.

I’m in love with life. I am fortunate to have relatively good health, and find human experience to be amazing and captivating. Though I find much to be critical of, I more often than not see problems as an opportunity for growth rather than a death sentence.

I find we are as fond of ignoring the positives in life as we are in denying its limitations. I wish more of us would delight in our humanity and not view it as an obstacle to overcome. The following song addresses this concern as well as any other mode I can articulate today.

I fully realize that suffering is the reality of far too many people. I for one will continue to do my best to help make the world be a better place.

Take some time today and everyday and take a long soak in that Bath of Joy we call human experience.

Life’s like a game of hide and seek we’re winners when we find
The clues are there if we look, listen and divine
My heart is racing when I sense an answer is coming to light
Oh I do feel a surge of meaning as my spirit does takes flight
Who can say “I found my heart”, who will say it loud?
If you can say “I live my heart”, say it ever proud

Bathe yourself in your joy
Be a sun shining forth
Share your gift with everyone
Solve the puzzle make it fun

People say many things that protect them from the dark
Yet many times these very words push them off the mark
Life is life and not a haven, predestined or a lark
Seek not hide is the answer to help ignite the spark
We can feel many things but only one at a time
We can learn many things because we aren’t sublime

This week I got an opportunity to see the Chicago Bulls on TV. I was interested in seeing their new rookie who has been receiving rave reviews. Going in to the game I had my doubts of this young talent. I had heard concerns about his outside shot and his free throw shooting.

Yet, during the game I saw little to support those concerns. His form on his jumpers and free throws looked solid so repetition and dedication should solve any problems regarding his shot, especially since his work ethic is quite impressive. His court vision and decision making were off the charts and his cool demeanor gave him a maturity beyond his years.

So I would like to offer up a nickname for the young man.

Derrick is very proud of playing for his hometown basketball team. So much so in fact that he is introduced as “from Chicago” as opposed to “from Memphis” which was the college he attended. Derrick grew up a Bulls fan and a Jordan fan. This link with Chicago may be the key for him carving out his own turf and getting out from the gigantic shadow of playing for Michael Jordan’s team.

Though Michael was the greatest Bull of all time, he let it be known many times that North Carolina was his home, and Chicago was his second home. With Derrick there is only one home and that is “Sweet Home Chicago”.

That is why I believe that Derrick’s nickname should include his home town. Now if you combine that with his initials you get DR Chicago or Dr. Chicago.

Dr. Chicago would be quite a handle for the young man. First it ties him with his home town forever, and is incentive for both him and the Bulls management to make him a Chicago Bull for his entire basketball career. Second the doctor tag is quite appropriate for a point guard.

As a doctor he carves up the defense, gives laser accurate passes and preserves the health of the team.

When pronounced Dr. Chicago sounds like you’re saying Dr. Zhivago. You could incorporate that image into Dr. Chicago by playing Lara’s theme when he’s got the ball or when he’s on a mission late in the game. The original Lara’s theme would be a surreal counterpoint to the usual bass thumping hip hop of most stadium music. This would echo Derrick’s personality in which he’s a humble quiet man in a sport of flash and ego. On the other hand one could easily make an electronic version of Lara’s theme which would boom with the best of them.

With the new president being from Chicago and the Olympics probably coming to Chicago, it makes total sense for the Bulls emerging star to be Dr. Chicago.

So how does one get a nickname popularized?

As they say Dr. Chicago is coming to a stadium near you, or Dr. Chicago is now playing everywhere. And if you see him play it does look like he is playing everywhere. He sees and uses the entire court, when he’s on the floor you can definitely say, “the doctor is in”.

When the Fed went before congress to ask for hundreds of billions of dollars to help our troubled economy they got the money under specific conditions. The major concern of congress was that the Fed use the money for specific purposes and gave full disclosure of how the money was being used. In fact congress gave deadlines for this information to be reported.

Well, those dates have passed and the Fed has refused to tell congress what they have done with the money. No one knows who they’ve given money to, how much and for what specific purposes. To my knowledge congress has taken no action on this refusal to comply.

It would seem to me that the Fed’s act of defiance breaks at least one or two laws. First they lied to congress when they promised to give full disclosure as a condition of getting the stimulus package passed. And second they are in subordination by directly refusing to comply with congresses directive to keep them informed.

If a citizen were to refuse to live up to their promise under oath to congress I would imagine they would be sent to jail until they complied. How many times has a journalist been threatened with jail if they failed to disclose their sources? And these journalists never promised to provide full disclosure.

The avowed reason for the stimulus/bailout was to provide liquidity and restore confidence in the financial system. The concern over the subprime and credit fiasco has led to a concern over the health of banks and other financial institutions. Banks are afraid to do business with each other out of fear of each others finacial stability and ability to honor their obligations. The lack of Fed disclosure is keeping all interested parties in the dark. Investors, banks and financial institutions are being prevented from knowing who is in trouble, what assistance they are receiving and how the Fed’s actions are influencing the financial crisis and credit problem.

This lack of disclosure is only intensifying the culture of fear and mistrust which is freezing our financial system. Yet, I guess congress has no problem with this. I guess everyone is comfortable heading towards a global depression, and would consider honesty too dangerous of a precedent to set.

Some habits are tough to break. Yet, as I’ve mentioned in a number of my recent posts, the actions of the government and the Fed appear to be intentionally ushering in a deflationary depression. Of course, their words will say otherwise, but actions speak louder than words. And verbal deception is a vital tool in business and politics.

This is is a follow up to my post “Political Fall Guys” in which I stated my contention that both McCain and Obama were being set up to take the fall for the emerging economic depression. I felt that the Democrats and Obama in particular was the perfect dupe for the status quo power lords. Who better than an idealistic gifted mediator to take the blame for a capitalistic downfall?

Any social programs he devises which help the poor and ask the rich to take some cuts will be labeled blatant socialism, and Obama like FDR will be credited (blamed) by economists and historians for making the economic depression harsher and longer than it needed to be. The economist will claim that his policies handcuffed and punished the wealthy and prohibited them from investing in the future and in creating jobs. Yes, defenders of trickle down economics will be howling at the moon for quite some time.

My fear is that once again those who caused the economic debackle will be back in power in a few years after the populace grows tired of the length and severity of the coming depression. What we’ve seen so far is but a mild preview of what is to come. All a president will be able to do is offer solace and assistance to those in need as the entire long business cycle unwinds. Historically economic down periods last 3/8 as long as the preceding up period which means this down cycle should last until 2015 or so. These cycles are well known and Mr. Greenspan himself often referenced and talked about the economic “winter” we are now entering.

In four years politicians will be telling us all how the bad economy is being exaggerated by the anti free market social programs being peddled by Obama and the Democratic House and Senate. Things like taxes on the rich, will be told, are the cause of economic depression, not its solution. Though this is totally false, it will be convincing.

Most likely we will not see another Democrat in the White House for atleast 12 years or so, just like when Jimmy Carter was set up by the previous administrations loose fiscal policies which spawned the stagflation that he fought through. The status quo elitists who capitalized on the boom as well as the bust will come riding in to save the day, while convincing us to once again accept the expanding gap between the haves and have nots as the best way to fashion and maintain a healthy and prosperous economy.

Yet, maybe Obama can steal a page from Hollywood and beat the odds. Does anyone remember the story line of Blazing Saddles where a bunch of white guys make a black man sheriff right before the town is supposed to be raided and pillaged by a horde of bad guys. In the movie Cleavon Little plays the deft and resourceful black sheriff who outsmarts all the marauders and saves the town.

Maybe Barack can do the same. Maybe he can unite this country and have us trust his guidance through these coming hard times. Yet, history is not on is side. This multi-trillion dollar credit fiasco will take years to unwind, and no act of genius or motivation will be able to solve the problem in four years.

I was very impressed with both McCain’s concession speech and Obama’s acceptance speech. It’s a shame that candidates do not believe they can talk that way during a campaign. Instead of demonizing each other they were praising each other and talking positively about the country and the world.

McCain talked of the greater good and how winning the election is not as important as helping the nation and the world be a better place.

For me it is just another example of how corrupt our politial system is. Only in defeat can a candidate put being elected into perspective. Elections should not be about saying what people want to hear. It should be about saying what one believes will make the world a better place. If people don’t agree with your view than you should not win the election. Why would I want people to elect on words and positions I don’t really believe in? In such a case I’m left with two alternatives.

One is to just to ignore what I said during my campaign and do what I think is right. In that case I got elected on lies and now I’m acting on lies.

The other option is to live up to my campaign promises and platform despite the fact that I do not believe in them. This is one of the reasons I view our political system as corrupt and in need of an overhaul. Currently are candidates are either dishonest or insincere or both. We can and need to do better than that.

Years ago most Americans assumed that political decisions regarding elections were decided in private smoke filled rooms. Platforms were constructed running mates selected and alliances formed all out of the public view. This view has somewhat faded and we now seem to think we’ve advanced to a simpler time where individual candidates control their own destinies despite being surrounded by speech writers, handlers and press secretaries.

Yet, as some of my most recent posts suggest I am of the old school in assuming that the media along with political powerlords help decide which candidates will emerge and be taken seriously for the presidency. Why they are selected has more to do with their ability to be elected then their policies and voting record. It has more to do with their ability to serve the status quo than their ability to serve the public. People, like Ron Paul, Howard Dean and Dennis Kucinich, who propose dramatic change from the status quo get marginalized and posed as kooks.

The winner of this election is going to inherit the worst domestic environment since the Great Depression. The people who work behind the scenes are well aware of this and have provided us with a healthy set of potential scape goats. Each candidate and their running mate, though relatively harmless to the status quo, can be used to deflect blame from our recent leaders and policy makers which have created the economic fiasco we will be dealing with for the better part of the next decade.

Though FDR was a popular president he is still blamed by many political and economic historians for reacting poorly to the demands of the depression. Such people state that FDR made the situation worse by inhibiting capitalism through the introduction of socialistic policies and programs. These individuals claim that the economy would have rebounded far sooner had FDR and the government supported big business rather than demonize and regulate it. In essence they have scape goated FDR for the depression because they can easily disassociate themselves from his policies.

Likewise I feel both candidates and their running mates are easy targets for this same kind of assault and scape goating. Though they are not a threat to the status quo, the current candidates can easily be viewed as political fringe and outsiders of mainstream capitalistic powerlords. One does not have to go all the way back to the 1930’s to see this form of political deflection of economic blame being utilized.

The policies of Nixon and Ford created the inflationary nightmare that Jimmy Carter inherited back in the mid 70’s. Yet, Mr. Carter was quickly blamed for much of what happened on his watch. He was labeled a political outsider and his “bleeding heart liberal” tendencies made him a weak leader who punished corporate America rather than work with it. In the long run Mr. Nixon was viewed as a liar and a crook, yet he and his insiders were not viewed as economically incompetent or blamed for the hyper inflation they spawned.

Will George Bush be remembered much the same? Will he and Greenspan walk away generally unscathed as the new administration takes the majority of the blame for how they incorrectly responded to the economic environment they inherited?

Mr. Obama is an easy target for this type of blame. First, he is not wealthy and has no particular economic credentials. Second his populist tendencies could easily be mislabeled as socialistic. Mr. Biden is one of the few remaining liberal icons in American politics so he too is quite an easy target. Mr. McCain though recently being painted as a conservative has a history of being able to work with liberals and make concessions when needed. This, couled with his age, will make it easy to depict him as being out of touch and not an economic insider. Ms. Palin is young, inexperienced and geographically an outsider.

Obama and Palin are additionally easy targets from racial and gender perspectives and could be used to turn back the gains in respect for these “minorities” by decades. This group of candidates almost looks to good to be true from a blame/scape goat perspective. It is for this reason that I believe they have been allowed to win our vote.

Those in the know are not surprised by our emerging economic crisis. They saw the deflationary depression coming long ago. That is why the Fed was lowering interest rates when gold was over a thousand dollars an ounce, and continued lowering interest rates when food prices doubled and oil went to near $150 a barrel.

Those in the know in their smoked filled rooms needed a scape goat. So they gave us not only one, but four potential scape goats. They have stacked the deck so they once again cannot lose. Once again the rich capitalists will not be blamed and held accountable for their incompetence and greed.

It is my contention that whichever party wins this election will not return to the White House for at least eight years if not more. Well, they may stay in the White House for the duration of the depression, but they will not regain the presidency for a long time after that. Though there really is no remaining substantial difference between the two political parties I do believe the Democrats will be declared the winner of the election. This will prevent all conservatives from being blamed for what is to come, and allow them to come and save the day when the depression has run its course.

Capitalism may not be fair or kind, but it certainly is not stupid or blind. Though I hope we use the coming turmoil to incorporate a better social/economic system, they are certainly setting up the possibility of history repeating itself. Like the last depression the rapist will once again come and save us from our depravity. Once again the capitalistic system will not be seen as the cause of economic hardship and imbalance but as the vehicle for growth, progress and the rise in the quality of life.

Speaking of old school the following is the lyrics for a song I wrote near 30 years ago which goes well with the themes of this post.

The title of this post is for all of you US baby boomers out there who remember the old radio and TV commercials for Maxwell House coffee. The slogan closing each ad was “Maxwell House coffee, good to the last drop”. Well, I guess the same could be said for all the international stock markets.

The markets decline has rivaled any thrill packed roller coaster fall with just as many people screaming and up chucking from all the excitement. Yet, I hate to be the one to tell you, but this ride is far from over. Very soon, like any good roller coaster, the market will rebound with a fury and we will be told that the greatest buying opportunity in decades is here. We will be told that the worst of the financial crisis is over, and that the stock market is a forward looking mechanism which sees better times on the horizon. Many will state the global recession is less severe than first thought and that the growth in developing nations cannot be side tracked for long.

Soon after that, the next round of US economic data will come out and quite plainly show that this recession has some staying power. At that point in time the next market fall will make our current roller coaster fall look tame in comparison. Who’s ever been on a roller coaster where the first fall is the deepest and most scary?

Another old 50’s coffee advertising campaign comes to mind to illustrate my next point. Who of you remembers the old Folger’s coffee ads where the ubiquitous Mrs. Olsen appeared in neighbors kitchens all over America brandishing a huge can of Folger’s coffee to save people from having a bad coffee day? Mrs. Olsen seemed to make it her life’s mission to make everyone in her neighborhood into caffeine junkies.

Well, the same focus of purpose can be said for the US financial and stvock market personnel. They need to keep you believing in the market all the way back down to reality.

I know many are losing tons of money right now and feel a need to get it all back as quickly as possible, but trying to do so is very dangerous indeed. If history is any guide we are still in round one of the market correction. Economic history is divided into bull and bear markets. Bull markets are times when the market climbs and bears are when they decline. The good news is that markets go up the majority of the time. The bad news is that when they go down they erase most if not all of the gains from the previous bear low.

Historical records show that the average bear market lasts 3/8 of the bull market that proceeded it. Since our most recent bull market lasted somewhere between 24 and 27 years long it would indicate that the our fledgling bear will last around nine or so years. Again this is not to say that we will not have some impressive and breath taking rallies, but the overall movement will be down. When people recall the last international depression they focus on the stock market crash of 1929. Yet, few realize that what came next was far worse. After the crash in ’29 the market rallied quite a bit, then the next plunge was far worse. When all was said and done the market had crashed a stunning 86% from its “secondary” high.

If history is any guide the next roller coaster free fall could be almost twice as steep as the current joy ride. This is not a scenario which promises an opportunity to recoup your loses from the stock market. Yet, all is not hopeless.

They say that in a bear market: “Cash is king”. What this means is that while stocks, commodities and even bonds are decreasing in value in a deflationary economic environment, money actually increases in value. If everyone else is losing money and you are not, your relative worth is increasing. In a deflationary economy prices and wages contract. Therefore, your money is able to buy more. It is very likely that $400,000 will buy more in 2014 than a million does today.

To give you an idea of how long it will take for the value of money and the stock market to return to 2007 levels we’ll take a look at how quickly the market recovered from its 1929 high. Well, it took until 1954, that’s 25 years before the market rose and stayed above its 1929 high. This would mean it will be 2032 before the Dow gets back over 14,000. Yet, since the length and magnitude of this bull is much stronger than the bull market of the 20’s it would seem logical that the climb back up will take more time.

Yet, will we even have a stock market in 25 years? Will capitalism survive? What would replace it? Though I have no answers to these questions I will discuss some of the possibilities in the next few posts.